Facing up to piracy in IT sector

Dubai, September 11, 2012

Software piracy is a key challenge facing GCC governments, who are nevertheless driving regional IT expenditure, says Jamal Abu Issa, president and chief executive of IT solutions and services provider Omnix International, in an interview.

Excerpts from the interview:

Which GCC sectors are currently the main IT spenders, and where are the main regional markets?

Governments are by far the biggest IT spenders, followed closely by the telecoms and financial services sectors.

The GCC is an emerging market and is growing strongly compared to the rest of the world. According to BMI’s [Business Monitor International] Information Technology Report, the GCC region is expected to grow at a CAGR of approximately 8.6 per cent between 2010 and 2015, from $8.4 billion to $12.7 billion.

Growth within the GCC IT sector is driven by the UAE and Saudi Arabia, the biggest markets. According to BMI, the UAE will spend $4.1 billion on IT in 2013, and Saudi Arabia $4.5 billion. We also see Qatar’s IT industry having significant growth potential. In 2013, BMI expects Qatar’s IT market spend to be $597 million.

What are the main GCC drivers?

Numerous initiatives such as Abu Dhabi 2030, the 2022 FIFA World Cup in Qatar and continuing construction plans in Saudi Arabia will be pivotal in driving IT demand over the next 20 years.

The GCC is an emerging market and is growing strongly compared to the rest of the world – this is driven by strong oil prices, GCC government budget surpluses, and a healthy pipeline of government investments in social and infrastructure projects.

We see tremendous opportunities for growth across the GCC, and Omnix is well placed to meet rising demand.

What are the main challenges facing GCC IT solutions providers?

The IT sector has been relatively insulated from the recent economic downturn, and while some business lines have been adversely affected, the overall trend is still towards strong growth.

Given that GCC governments are leading IT spending in the region, declining oil prices could squeeze budgets dedicated to technology projects. However, with the outlook for oil prices remaining positive for the medium term, and with GCC budget surpluses remaining healthy, we do not see this as an immediate challenge.

Are GCC governments doing enough to combat software piracy?

According to the Business Software Alliance, the global software piracy rate was 42 per cent in 2011. The same report points out that in the Middle East and Africa the commercial value of unlicensed software was just under $4.2 billion last year. Software piracy has a direct impact on the economy of a country, costing society in terms of job losses and missed opportunities, particularly in the software industry.

Tackling software piracy takes time and resources. GCC governments are taking a strong stand against software piracy and the establishment of organisations such as the Arabian Anti-Piracy Alliance are testament to this. Some governments, such as in Saudi Arabia, are also implementing laws which allow for the conviction of pirates.

Fighting piracy requires a coordinated approach among private and public sectors. It also requires a gradual education process to be rolled out across the GCC, raising awareness of the costs associated with piracy and the responsibility that we hold as individuals and citizens of a country to help address it.

There is a learning curve associated with combating piracy, and the requirement for a cultural shift and a greater degree of understanding among GCC populations. Although anti-piracy strategies across the GCC are at various stages of maturity, they are all heading in the right direction.

Omnix has a team dedicated to combating software piracy, which works closely with independent software vendors and government agencies.

To what extent are Middle East organisations equipped to deal with cyber security threats?

By default, our clients expect solutions to be safe and secure as they deal with sensitive data.

At the top level, cyber attacks across the world are increasing in sophistication and reach. As a result much more responsive and dynamic reactions are required of both the private and public sector. A greater degree of coordination is necessary among sector experts, including researchers, private businesses and governments to understand emerging threats and devise appropriate solutions to them.

Organisations across the world today are much more aware of the need to address cyber security threats, especially given the increase in e-services, which is taking a greater proportion of a business’ operations online.

How are regional IT priorities changing?

As regional IT literacy grows, governments and businesses are looking more to technology as a tool to ensuring the provision of quality services in a timely, convenient and efficient way. The reality is that technology can help an organisation reduce costs and increase revenue. The growing trend towards the provision of e-services is one example of this. We expect to see continued growth in e-services, particularly within the government sector. As more businesses – public and private – go on-line, cyber security and privacy will become a greater priority.

Competition among GCC governments to deliver new public services is cited as a key driver for IT spending. Why do they compete?

There is a real sense of pride across the GCC when it comes to the provision of excellent public services to citizens, and governments compete to be the best, most dynamic and responsive among their peers. The competition is also driven by the aspiration by several states within the GCC to attract labour and be seen as a prominent business hub in the region – the provision of excellent public services is the backbone of an efficiently functioning, growing economy.

As an example, Holy Makkah Municipality (HMM), one of Omnix International’s most prominent clients, has recently been recognised with a 2012 “Honorary Recognition Award” by the international IT architecture firm iCMG for its new e-government initiative. Omnix International partnered with international IT solutions provider Oracle Corporation to provide a best-in-class e-government solution for HMM’s municipal operations. The solution services more than 30 different business applications.

A single public portal now enables citizens and third parties to make online applications for the above services and underpins HMM’s strategy to make government services and employees more efficient and cost effective.